Whilst welcoming the Government’s intention to include within the Code the principle that a tied tenant should be no worse off than a free-of-tie tenant, the Report states that further clarity is needed on how this will be achieved through legislation. The Committee is also supportive of the inclusion of a mandatory free-of-tie option.
The Adjudicator which will oversee the Statutory Code should be given the full suite of powers, including the power to fine, states the Report. At the same time, the Committee notes that PICAS and PIRRS have been positive developments in the pub industry and urges the Government to ensure they are retained in the new statutory framework.
Commenting on the Report, Adrian Bailey MP, Chair of the Business, Innovation and Skills Committee, said:
"The Government has belatedly come to the right decision and consulted on establishing a statutory code and an Adjudicator. I welcome this action and only wish it had come when we first recommended it almost two years ago.
The Government must now bring forward a Bill at the earliest opportunity and certainly no later than the start of the next parliamentary session. Any more delays would be unacceptable, we have waited long enough.
The principle that a tied tenant should be no worse off than a free-of-tie tenant is sound. But clarity is needed on how this will be achieved in practice.
The BBPA is against the inclusion of a mandatory free-of-tie option and highlights the benefits of the tied model. We believe a free-of-tie option should be included in the Code. If the tied model delivers significant benefits it has nothing to fear—it will continue to be an attractive model for lessees and the free-of-tie option will not be taken up.
The effectiveness of the Statutory Code will be seriously undermined if overseen by a toothless Adjudicator. The Adjudicator should be given the full range of powers, including the ability to impose fines"
Conclusions and recommendations
The Government proposes that the Statutory Code should apply to companies which own more than 500 pubs. Whilst seeing the rationale for setting a threshold, there is merit in including a level of flexibility to allow the Secretary of State subsequently to alter the threshold in the interests of the industry [paragraph 38].
The Statutory Code should only apply to pub companies with leased and tenanted pubs. The Department should reflect this in the Bill [paragraph 39]